If you look at those poll figures this way . . .

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The magazine Newsweek ran a column for some years called "The Conventional Wisdom". Put together by Jonathan Alter, it was an itemised compilation of the fashionable theories of the week held by Washington's political elite. An up or down arrow was used to depict whether the subject of the item was a winner or loser.

A wonderful idea, it starkly revealed the chaotic and fickle nature of political analysis. One week the president is riding high and destined to win in a landslide; a few weeks later he is about to be forced from office. The column's main purpose was to reveal that in politics expert predictions mean little and trends can last but a moment.

After all, political analysis is large part soap opera that requires endless plot variations and predictions to sustain interest. Put the conventional wisdom into an Australian context and the view in Canberra is that Labor has a virtual lock on the next election. But has it?

The recent polls, taken to be so positive for Labor, are not so cut and dried as they have been made to appear. The view expressed by most commentators is that the budget, while overtly generous, was a flop for the Government. Initially grateful for the tax and family payments handouts, voters soon began seeing it as a cynical voter-buying exercise.

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Moreover, as the Prime Minister conceded to his party room on Tuesday, the Government's support for Iraq has been a drag. The Government is also struggling around the issue of succession: is John Howard going? If so, when will Peter Costello succeed him?

Meantime, Mark Latham appears something of the teflon man. He started well, giving Labor a "new" look, but he appeared to stumble in his incursion into foreign policy. His budget reply was widely considered insubstantial. Still, the raw numbers look good for Labor.

On a two-party preferred basis the Morgan poll had Labor five points ahead in mid-May. Newspoll had Labor even better positioned at 54 per cent to 46 per cent. The Herald Poll, conducted by ACNielsen and taken a week later, had Labor leading by 56 to 44.

Given that Labor has been consistently ahead virtually since Latham took the leadership, it is easy to conclude that this Government is heading for defeat. But it is not that simple. There are signs the Government is slowly but surely coming back at Labor and is tracking well enough to overtake it by the election. The strong Newspoll and Neilsen results for Labor were counter to a trend that all the polls have been showing.

Under Latham, Labor's two-party preferred vote peaked around February and has been declining since. The Morgan poll continued to show this trend through the budget.

The Morgan numbers show the Coalition's two-party preferred vote rising four percentage points to 47.5 since February and Labor's falling the same amount to 52.5.

Note should also be taken of the high approval, and relatively low disapproval ratings being enjoyed by Howard. At 54 per cent and 38 per cent respectively, says Newspoll, Howard is retaining the fundamental respect of the electorate.

Last week I wrote how US presidents rarely lost their bids for a second term with approval ratings above 50 per cent and the difficulty George Bush was facing with his ratings now in the mid-40s. It is a similar story in Australia, although the big difference is that Howard is chasing a fourth, and not a second term. Latham also enjoys high voter approval. Still, Labor insiders believe that with Howard sitting on a relatively low disapproval rating he will be difficult to beat.

Nor should the budget be written off as a failure. It was perhaps the most tightly politically targeted budget of modern times, directed at the family and taxation concerns of voters in the marginal electorates. While the political intention brought negative comment, the money hit the target.

The real political impact will not show in national voting intention data but marginal seat polling which no one has yet seen. It is a point Latham acknowledged when talking to colleagues this week.

There is no doubt the Government has real problems. It needs Iraq off the political map, and the succession issue will dog it. But with strong credentials on economic management and an opponent not as sure footed as he should be, this Government will be very competitive come election time.